The advent of the internet has opened the door for e-commerce, which not only includes B2C businesses but also supports B2B business relationships.
Companies like Amazon and eBay have made billions, and millions of internet-based businesses have been spawned in the last decade.
According to the Pew Internet and American Life Project Survey, online shopping is the number nine internet activity in the US. In order for e-commerce systems to support the high volume of internet traffic and shopping transactions, a robust and efficient back-end inventory system must be put in place. This is to ensure that through accurate and up to date inventory records, orders can be rapidly fulfilled.
In order to achieve this, inventory systems should ideally be web-enabled as well as integrated to work with the web server seamlessly. In fact, these inventory systems need to include SKUs, descriptions and prices, but also have the capability to store extensive information such as product details, product images, location according to warehouse and thumbnails as well as meta-tag information. Furthermore, inventory systems should be integrated with order fulfillment systems, and allow automatic updates. This way, once items are shipped out or orders placed, inventories will reflect a true account of the actual quantities.
Some inventory solutions for e-commerce also include attributes like order trigger reports, which are generated when pre-set re-order levels have been hit. Apart from that, usage-trend reports by product categories will provide a snapshot on inventory utilization rates. Further, standard inventory management practices should also be included in an e-commerce inventory management system where bar-coding and RFID are supported. With a web-enabled feature, the system should also allow system log-ins from virtually any location that has internet access.
Also, certain inventory solutions have the added flexibility to incorporate linking to other business systems such as manufacturing systems, purchase order systems, order types and order fulfillment. Additionally, these systems should also be equipped with inventory usage reports, order forecasts as well as product return reports.
Finally, a good back-end inventory system for an e-commerce business will help to ensure good customer satisfaction levels. Without a effective system, management issues will arise and complications in inventory management will ultimately affect business performance.
Ken Town is VP Research and Technology at Invendia, a leading provider of Vendor Managed Inventory (VMI) and Web-based Inventory solutions.
